Cost inputs

How on earth do people in power think that a farmer can spend the money on inputs with not one or two, but all the markets being lower than a snakes belly in a wagon rut? I am a believer in holding on and ride it out, but I hope this ride runs out of gas pretty darn quick....

Think it's bad now wait till corn hits $2.00 and beans go back to 5.

That's what it has been most of my farming years.

Gary

I remeber that you commented once that farmer's needed high energy prices to keep crop prices up. You were right, with oil in the 40's, corn is lower. Where do you think it will go from here?

I will repeat it again, if oil stays down so will all grains.

Without demand for corn use in ethanol and the ability to sell higher priced ethanol, corn will stay low.

And if the wheat and soybeans do not have to compete with corn for acres they will remain low also.

When they cut back crude pumping and crude goes to $75 plus a barrow then corn may climb a little.

My target price to sell my remaining 08 crop will be $3.25, here locally not in Chicago.

There's more chance for oil to remain low for 8 months than for a big increase cause of the total economy. Demand for gas is down cause of the money scare.

Gary

Gary, Do you think fertilizer and seed will drop accordingly? If not what are some of your ideas for weathering the storm? I have heard talk of cutting back acres, going back to conventional seed, crop rotations to include clovers for nitrogen etc. As I am fairly new at this game I value the opinions of you veteran farmers.

I think there is a good chance for an odd ripple in grain prices in the next 18 months. Either they go up in value this winter yet to allow more corn to be planted, or they will have to spike up in 15 months to ration short supplies.

At these prices, cost of inputs is not covered, and it does not look like current inputs will come down much, they've been locked in. Without higher corn prices soon, we just won't have as many corn acres planted worldwide. While demand will drop some, it won't drop that much.

Some higher prices soon, or a real rollercoaster again in 15-18 months. I'm not sure which the current ecconomy will allow tho?

Of course, this is worth what it cost you....

--->Paul

I'm with Paul on this, corn has got to rally in the spring or we will be in real shortage situations. Also, there are/will be real opportunities to lock in inputs at discounts. Its going to be a very volatile market. At least one major cooperative and one major independent fertilizer distributor have already taken gigantic writedowns on inventory of urea, phosphate, and potash that they purchased at last summers prices (10s of millions of dollars in writedowns). They havent put it on the market yet and wont keep it at that price for long. This year one would be wise to ensure that financing is in order to ensure that you can get inputs at the whatever discounts come up.

Our local coop has already lowered the cost of fertilizer some.($100 a ton)The price is still to high. A lot of suppliers were all bought up for the upcoming year and cannot lower much. Our Coop was only 1/3 bought up so they are gonna average it out to all. Wholesale has dropped by $150 to $200 a ton on P and K so far.

But if the retailers don't buy soon it will not be here in time for spring.

I just cut back on my fall application but still put some on.

Nitrogen is the one you have to use and not scimp on.

Gary

Do you really think there will be a short supply paul?

We used record bushels last year and still had a 1.8 billion bushel carryover. Useage is already lowering for this year cause of cheap ethanol.

Less cattle will be fed also.

The place to be in 2 years will be a feed lot full of cattle.

Gary

I'm not thinking we will get $8 corn again.... But I don't think $2.80 corn works with current fertilizer prices. Seems most farmers have held off on fert; either real soon price drops or we get less corn & wheat? Don't think we can get enough fert through the supply lines if we don't start with it soon. Without enough fert in use & high input costs in general, more beans, less corn & wheat....

Ethanol plants are going strong around me, other than the one Poet plant that aborted a couple months short of firing up. New plant is being built, due running in a year in fact. These current lower prices should be working a bit more corn through the regular international channels.

I'd think corn would need to bump up a buck to get folks excited about growing it. Doesn't have to last long, just enough to get some pencils moving & inputs bought....

Beans look kinda bleak to me - maybe everyone will feel like me & plant more corn than last year!

In the end I don't know any more than others, but I think corn prices are going to look better than bean prices somewhere down the road. The chance of a short(er) corn crop are better than beans...

--->Paul

I hope you are right paul.

We sure could use that other dollar on corn.

And you are right on that fert. pipeline. That one scares me a little.

Gary

I will tell you what I am thinking, after inaguration, if this public works plan comes together, that fuel will go back up if Garys theory is right this should help our prices also this should put a few folks back to work and that has got to help this stail economy. Hopefully in many ways I hope they keep this biofuel thing going. Paul do you happen to know how bio compares to $75 a barrel oil? This seems to be the target price that they are shooting for.

I'm just REAL glad I hung on to my cattle. Weren't you pondering selling yours this spring Gary?

I am selling my cows over the next 2 or 3 years.

Had 80 head 2 years ago and am down to 45 now. Will sell another 15 or so in the spring.

Gary

JUST A NOTE ABOUT EHTANAL AT PEAK GAS PRICES 3.50 ON UP .E-85 AT THE PUMP WAS A STEADY .50CENTS LOWER DROPPED TO .30 WHEN PRICE FELL BELOW 2.50, AFTER $2 THE E-85 WAS ABOUT EVEN
AFTER 1.75 WAS .20 HIGHER,, HAS BENN RIGHT ALONG
REGULAR JUMPED FRIDAY HERE FROME 1.35 TO 1,72 IN TWO DAYS .TODAY GAS WAS 1.68 AND E-85 1.58 ???

I don't understand your thinking that 'the people in power' have any responsibility to make sure that a farmer makes a profit- any more than any industry should be guaranteed a profit. That is pretty much Econ 101. Is it the job of government? lol What is government efficient at? The economy is cyclical.